​BATH BOMB BOOT CAMP

What are Drop Shipping Companies?

The world of e-commerce is fast evolving with new practices and processes that largely shape the consumer experience. One of these new practices is drop shipping. Drop shipping is widely used by many wholesale distributors and e-commerce stores. It means to streamline the marketing and purchasing processes and to simplify the tasks of each concerned parties.

In this article, we will discuss what this type of shipping is, how drop shipping companies work, and what the difference between the three main parties involved in the process of wholesale drop shipping. ​

What is Drop Shipping?

Drop shipping companies do not have stocks of the items, so they never see the products first-hand especially if the partner wholesale supplier is far.

Wholesale suppliers use the services of drop shippers as a way of outsourcing the marketing aspect of the business. This also works excellently when trying to localize products. The drop shipper who is local in a town or city is in a better position to market the product and deal with client orders and inquiries than the wholesaler who is miles away.

Drop shippers also benefit because they can conduct business with minimal capital and no need to maintain and track inventories.

Another thing to note is that customers wouldn’t easily know that a store is drop shipping. The delivery package that buyers will receive will have a return address and invoice customized to the drop shipper’s e-commerce store address. This will seem like the package directly came from the drop shipper and not the wholesale supplier. ​

​Wholesale drop shipping is a retail method where a separate entity called the drop-shipper accepts orders for products on behalf of a wholesale supplier. The drop shipper forwards the customer orders to the wholesale suppliers who will then ship the goods to the buyers.

Manufacturer vs. Wholesaler. vs. Drop Shipping Companies

A manufacturer is the actual builder or producer of a product. For example, some companies have their own warehouses where they manufacture bath bombs. A wholesaler is a person or business entity who buys from the manufacturer of bath bombs to resell the products to retailers. This wholesaler gets the products for a discount this way.

A drop shipper is a person or a business entity who will accept orders for products and forwards these orders complete with customer and shipment details to the wholesale suppliers. The wholesale distributor will then ship the products directly to the buyers.

Pros and Cons of Wholesale Shipping

Wholesale drop shipping sounds attractive to those looking to start a low-cost business. However, it’s important to consider the pros and cons of this retail process:

Pro #1: Convenience. There’s no need for drop shipping companies to worry about fulfillment and inventory. Drop shippers can just focus on the order acceptance and transfer processes, marketing plans, and customer service. Pro #2: Mobile. Drop shippers are not tied to a physical store, so anyone with an internet access and functional telephone and mobile number can run the business.

Con #1: Difficulty in syncing with stocks. It’s hard to sync real-time status of stocks to the record of drop shippers, so this results in out-of-stocks and delays in order processing.

Con #2: More room for confusion. Since there are three parties in the supply part of the equation – the manufacturer, wholesalers, and drop shippers – there will be more room for errors, confusion, and gaps in coordination.

Drop shipping is an innovative e-commerce solution that has taken the e-commerce world by storm. If planned meticulously and continuously improved, wholesale drop shipping can be a highly lucrative business.